Got a tricky question? Receive an answer from students like you! Try us!

Securitization, Regulation and Factors Contributing to Financial Crisis - Essay Example

Only on StudentShare
Masters
Essay
Finance & Accounting
Pages 4 (1004 words)

Summary

Securitization, regulation, and factors contributing to the financial crisis Introduction Regulations and threats are some of the factors in a business environment and they play a major role in the financial sector that is sensitive to consumers’ interest and offers diversified and sensitive risks…

Extract of sample
Securitization, Regulation and Factors Contributing to Financial Crisis

This paper reviews the current financial crisis with focus on securitization, causes of the crisis, current regulatory framework and the scope of Basel Committee and proposes possible measures regulating the financial sector. The process of securitization and its significance Securitization refers to the transfer of assets from an entity, the originator, to another entity that is set for such purchases with the aim of increasing the generator’s liquidity level. The generator, a financial institution, sells its debt assets to the third party who in turn, provides agreed amount of cash in exchange. The process of securitization incorporates a number of stakeholders. It begins with the financial institution that wishes to securitize its assets. The originator offers its assets to an issuer that must be an established entity for such a purpose and the issuer obtains rights over the assets. The issuer is further a native organization and acquires rights of the assets. Fundamental to the securitization process is the special purpose vehicle concept that transfers possession of the subject properties from the originator to the issuer and safeguards the issuer’s right over the property should the originator be declared bankrupt. ...
Download paper
Not exactly what you need?

Related Essays

Role of "securitization" and "structured finance products" in the recent banking and financial crisis
The paper describes the role of securitization and structured finance products in the recent banking and financial crisis. Financial institutions cater to the needs of different types of customers by providing relevant financial services. Financial institutions worldwide have been affected by the adverse market environment created by the US sub prime fiasco. Trouble began when the financial companies started relying too much on the innovation in the blind faith that it will yield returns. As it is common knowledge that banking industry has suffered the most due to the current meltdown, the…
7 pages (1757 words)
Financial Regulation & Supervision
These regulations not only protect the firms involved in online transactions but also the cardholders from being exploited by the online frauds. Such compliance requirements have posed new challenges as to how to minimize compliance costs and continuously monitor the security systems to stay ahead of web criminals. Nevertheless, the benefits seem to surpass the costs associated with these regulations. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Facts of the Case 5 Andrews’ Options with Bank 6 Advantages of PCI DSS Compliance Advisor 10 Conclusion 11 References 13…
9 pages (2259 words)
Financial crisis
In such a situation, the entity would face liquidity problems, have cash flow problems, and see the net worth decreasing. If it happens to a market or a bank, then there would be panic selling that further brings the prices of stocks down. There would be a run on the banks with a large number of people attempting to withdraw cash. Assets would lose their valuation. Depending on the severity of the crisis, the market would recover in a few days or the ill effects would persist for a few years. A financial crisis is followed by recession and a general slowdown of the market. Financial crisis can…
8 pages (2008 words)
Causes for the 2007-2008 Subprime Mortgage Crisis the role of mortgage-backed securities on the bank leverage
Limitations of the study 25 5. Implication of the Discussion 26 References 28 1. RESEARCH METHODOLOGY 1.1 Chapter Introduction Research is not just the process of gathering information but it is answering the unanswered questions or creating something which is not currently existing (Goddard and Melville, 2004). In simple words research refers to the search of knowledge. Thus it can be defined as the systematic and scientific search for significant information on a definite topic. It involves defining and redefining a problem, preparing hypothesis or recommending solutions; collecting,…
34 pages (8534 words)
Factors contributing to Greece Financial crisis
There was a wide margin of money supply circulated in the economy versus the available increases in money supply that remained in banks. Another major discovery was a wide gap between importations and exports. Imports exceeded exports by the billions of dollars each year. Yet the ECB, EU, and IMF did not recommend drastic reduction in the importations. Instead, these financial organizations recommended retrenchments of government employees. The budget defitis could have been drastically reduced by simply cutting down substantial imports of goods that people in Greece can readily produce. But…
35 pages (8785 words)
Banking Regulation and Risks
The banks are now on a constant quest to out-wind the effects of the global financial crisis and encounter a new business era. The change in the regulatory framework of banks has been observed globally. The practices of the banks of increased regulatory requirement have are hindered the banks from progressing (Ernst & Young, 2011). Hence, this report aims to highlight the effect of the global financial crisis on the regulatory framework of the banks. It will signify the need for the banks to alter the global banking landscape. This has become mandatory so that the system can run smoothly and…
6 pages (1506 words)